Can You Use Online Employment Contract Templates As-Is?

What Does the “Disclosure of Working Conditions” Required of Employers Under Japanese Law Mean?

Many foreign business owners hiring employees for the first time start by searching online for employment contract templates.

Since many are available for free download, you might think:

“Isn’t this good enough?”

However, in reality, we do not recommend using them as-is.

This is because, in Japan, the items that must be included and clearly stated in an employment contract are specified by law.

In this article, we’ll explain the precautions to take when using online templates and discuss Japan’s obligation to specify working conditions.

Templates Are “Reference Materials,” Not “Finished Products”

There are various employment contract templates available online.

However, many of them

• are based on laws from other countries
• do not reflect changes in Japanese law
• or contain only general information

in some cases.

Furthermore, the details vary from company to company.

• Working hours
• Pay structure
• Days off
• Job duties
• Probationary period, etc.

Therefore, there is no “one-size-fits-all” contract that can be used as-is by any company.

Japan Has a “Duty to Disclose Employment Conditions”

In Japan, when hiring employees, employers are legally obligated to disclose the terms and conditions of employment.

In other words,

it is not sufficient to simply say, “It’s fine because I explained it verbally.”

Employers must notify employees of the matters stipulated by law in an appropriate manner.

It is particularly important for foreign business owners to understand the differences from the rules in their home countries.

It is particularly important for foreign business owners to understand the differences from the rules in their home countries.

What Are Mandatory Disclosure Items?

First, there are certain items that must be disclosed without exception.

These are generally referred to as “mandatory disclosure items.”

The following are typical examples:

• Term of the employment contract
• Work location and job duties
• Start and end times, break times
• Days off and leave
• Wages
• Matters related to termination (including grounds for dismissal)

These are important terms and conditions of employment that, in principle, must be disclosed by every company.

If a template lacks any of these details, it is not appropriate to use it as is.

What Are “Relative Disclosure Requirements”?

On the other hand, there are also items that must be disclosed only if the company has such a system in place.

These are called “relative disclosure requirements.”

For example:

• Retirement benefit system
• Bonuses
• Temporary Wage Payments
• Expenses Billed to Employees
• Occupational Safety and Health
• Vocational Training
• Awards and Disciplinary Actions
• Leave of Absence Policies

and so on.

Failure to explain these matters—even if the company has such policies in place—could lead to future disputes.

Some Matters Must Be Provided in Writing

In some cases, simply explaining the terms of employment is not sufficient.

The law requires that certain important matters be disclosed in writing.

For example,

• Contract term (and criteria for renewal, if applicable)
• Workplace
• Job duties
• Start and end times, and whether overtime work is required
• Holidays and leave
• Wages, pay period and payment date, and method of payment
• Matters related to resignation

and so on.

In recent years, providing this information via email or other electronic means has been permitted if certain conditions are met; however, if an employee requests it, the information must be provided in writing.

Therefore, this approach may not always be sufficient.

“I explained it verbally”

“I just sent it via chat”

The Law Remains the Same Even for English-Language Templates

Some foreign business owners believe that

“an English-language template is reliable.”

However,

being written in English and complying with Japanese law are two separate issues.

Even if a contract is in English,

if it does not include the working conditions required in Japan, it will be an inadequate contract.

What matters is not the language,

but that all legally required content is included without omission.

It is important to create a contract tailored to your company

Employment contracts must be drafted to reflect each company’s specific circumstances.

• Whether the schedule is shift-based or fixed
• whether a probationary period is established
• whether overtime is required
• whether there is a bonus system

—the content of the contract will vary depending on these factors.

While online templates can serve as a reference, it is important not to use them as-is but to modify them to fit your company’s specific circumstances.

Especially for Foreign Business Owners with a Business Manager Visa

For foreign business owners operating a company under the Business Manager status of residence, the hiring of employees directly impacts the company’s credibility.

Drafting an appropriate employment contract and clearly specifying the necessary terms of employment is the first step toward building a relationship of trust with employees.

Furthermore, an appropriate employment contract is essential for proper labor management and enrollment in social insurance.

An employment contract is not merely a piece of paperwork.

It is also a vital document that demonstrates the company is operating appropriately while complying with the law.

Summary

Employment contract templates found online can be used as reference materials.

However, they may not always be suitable for use as-is.

In Japan, employers are legally obligated to specify working conditions, and there are rules established by law.

• Mandatory Disclosure Items
• Discretionary Disclosure Items
• Items That Must Be Provided in Writing

and items that must be provided in writing.

The key is to “draft a contract that suits your company and complies with the law.”

This forms the foundation for building a relationship of trust with employees and continuing your business with peace of mind.